Denmark-based ship fuel supplier OW Bunker is on the brink of bankruptcy after uncovering a $125 million fraud committed at its Singapore-based subsidiary.
The company told investors Thursday that the financial impact of the fraud can not be assessed and they should assume the company’s equity has been totally lost.
The fraud was allegedly committed by senior employees at OW Bunker’s Singapore-based subsidiary, Dynamic Oil Trading.
OW Bunker has filed for a court restructuring process.
The company also dismissed its head of risk management, executive vice president Jane Dahl Christensen.
Trading in shares of the OW Bunker group has been suspended.
The company currently owes 13 banks $750 million and has been unable “to find a solution with the syndicate banks.”
The fraud case is still being investigated but the company said preliminary findings show a potential loss of about $125 million.
Total trading losses are now expected to be at least $150 million, OW Bunker said.
Details about the extent and nature of the fraud have not been disclosed.
OW Bunker, along with its subsidiaries OW Bunker & Trading A/S and OW Supply & Trading A/S, is the third largest company in Denmark by revenue.
Refineries and other fuel suppliers are stopping deliveries and may be cancelling long term contracts with the group, Reuters said.